ST. PAUL, Minn., Oct. 20A federal appeals court struggled today to determine whether President Clinton's alleged proposition of Paula Jones seven years ago was offensive enough to justify a sexual harassment trial and, if it was, whether his affair with Monica S. Lewinsky should be admitted into evidence.

During an hour-long court hearing here, a lawyer for Jones asked the three-judge appeals panel to overturn the April dismissal of her case, arguing that Clinton's purported conduct was so "egregious" that she should have the right to take her grievance to a jury. The president's lawyer countered that even if Clinton did drop his pants and ask for sex, which he denies, Jones did not suffer by rebuffing a crude advance.

Six months after U.S. District Judge Susan Webber Wright threw out the case, the judges wrestled with what standard for sexual harassment they should apply to Jones's allegations. Complicating the situation further was the Lewinsky matter, which hit a courtroom for the first time since independent counsel Kenneth W. Starr last month accused Clinton of committing perjury and obstruction of justice by trying to hide his sexual relationship with the former intern. The judges themselves brought up that issue when the lawyers passed by it with little mention.

"It's not an easy case," Chief Judge Pasco M. Bowman II concluded.

While judges' questions do not necessarily indicate how they will ultimately rule, two of the three judges appeared sympathetic to Jones. The same panel split 2 to 1 in her favor when it rejected a bid by the president in January 1996 to delay the case until after he left office.

Bowman and Judge C. Arlen Beam, two Ronald Reagan appointees who ruled for Jones the last time, asked skeptical questions of Clinton's lawyer and both were already thinking ahead to the next step in trying to determine how to handle the Lewinsky evidence "if we send it back," as Beam put it.

The third judge, Donald R. Ross, a Richard M. Nixon appointee who supported Clinton during the last round, challenged the arguments by Jones's lawyer and suggested the Lewinsky affair was not relevant because it was a consensual relationship -- and one that Clinton may not have even initiated. "I'm not sure the record will disclose who made the sexual advances," Ross said.

Based on the comments today, Gilbert K. Davis, a former Jones lawyer, predicted the judges would revive the lawsuit. "If I had to bet, I'd say it'll be the same 2 to 1 split," said Davis, who was on hand in his capacity as a television analyst.

When Wright dismissed the case in April, she ruled that even if Clinton did what Jones alleged, such "boorish" behavior was not severe enough to constitute sexual harassment. Even before then, she had excluded the Lewinsky evidence to avoid interfering with Starr's probe, ruling that it was not central to the case.

Jones appealed Wright's decision to the 8th U.S. Circuit Court of Appeals, which is based in St. Louis but often hears cases elsewhere in the circuit, including St. Paul. Both sides tried to head off today's showdown with settlement negotiations, but failed after Jones insisted on a $2 million package, with half coming from the president and half from a voluntary offer by New York developer Abe Hirschfeld.

Clinton's chief attorney, Robert S. Bennett, said at the courthouse today that such a deal was unacceptable but left the door open to new talks. "It's time to get all this behind us, to get this behind the American people," he said.

Moments later, chief Jones counsel Donovan Campbell Jr. told reporters that settlement efforts would be "ongoing," promising to contact Bennett in the next few days. "What Paula Jones wants is justice," he said.

Inside the courtroom, most of the arguments focused on the legal standards necessary to prove sexual harassment and a hostile workplace. Under Supreme Court precedent, conduct must be pervasive or severe to create a hostile workplace. Given that Jones's complaint centers primarily on a single alleged incident, the judges today seemed uncertain how to define severe.

"How bad is bad enough?" Bowman said. "We're having a little trouble in this case deciding what the applicable standards are."

Clinton attorney Amy Sabrin argued that the alleged incident in Little Rock's Excelsior Hotel was not bad enough. Jones never filed a complaint, sought counseling or medical help, or lost out on raises, Sabrin noted. When courts have deemed a single incident severe enough to merit a sexual harassment case, she added, it usually involved rape or sexual assault. "The issue is not whether the conduct is offensive," Sabrin said. "The issue is whether it violated the Constitution."

That is a decision for a jury, countered Jones's lawyer, James A. Fisher. Jones, who did not attend yesterday's hearing, considered herself "functionally demoted" because she was not given good job duties and could not complain because Clinton was then governor, Fisher said.

"If Paula Jones had complied . . . and performed oral sex on him, we would all agree she would have a solid gold case of sexual harassment," Fisher said. "But why should she have a weaker case because she refused to comply?"

Legal scholars have said Jones faces long odds because few comparable cases make it to a jury. But a recent ruling by the 8th Circuit in another case may signal a greater willingness to send even weak claims to trial. On July 23, a three-judge panel reversed a lower court dismissal of a sexual harassment complaint brought by an Arkansas woman who accused her ex-boss at United Parcel Service of constantly "coming on" to her in a less severe fashion that Jones has alleged of Clinton.

"While we concede that the facts of this case are on the borderline of those sufficient to support a claim of sexual harassment," the court said in that decision, "we cannot say that a supervisor who pats a female employee on the back, brushes up against her, and tells her she smells good does not constitute sexual harassment as a matter of law."

The panel that issued that ruling included Bowman and, coincidentally, UPS was represented by Kathlyn Graves, an Little Rock attorney who has worked for Clinton in the Jones case.

The Lewinsky matter came up at the end of today's hearing when the judges asked whether it should be allowed into evidence if they overturn Wright's ruling.

Fisher said Clinton should be held accountable for his deception in the case: "He flat-out lied. This court needs to send a clear message that will be heard all the way in the District of Columbia that our justice system will not tolerate or countenance perjury, subornation of perjury or obstruction of justice."

Sabrin said Wright based her decision to exclude Lewinsky because she feared the situation "would turn the trial into a circus and that hasn't changed. . . . We wouldn't just be trying the Monica Lewinsky case, we'd be trying the Ken Starr case as well."